EconoMeter panel debates the debate

Republican presidential candidate, former Massachusetts Gov. Mitt Romney, right, and President Barack Obama, left, walk on stage at the end of their first debate at the University of Denver, Wednesday, Oct. 3, 2012, in Denver. (AP Photo/Pablo Martinez Monsivais)
— AP

Republican presidential candidate, former Massachusetts Gov. Mitt Romney, right, and President Barack Obama, left, walk on stage at the end of their first debate at the University of Denver, Wednesday, Oct. 3, 2012, in Denver. (AP Photo/Pablo Martinez Monsivais)
/ AP

Q: Did the presidential candidates’ comments satisfactorily address the many issues facing the economy in 2013 and beyond? (Please give each a grade for their answers on the economy.)

Panel's answer: Yes 3, No 5

I would grade the debate over the economy as a B+. First, there were clarifications (two paths, different directions) on issues such as reducing the public debt and the size of the annual deficits, creating jobs and lowering unemployment, the role of government in regulating the economy and the future of entitlements. The candidates’ prescriptions for improving these areas are in their proposed budgets, reflecting their choices. On one hand, short-term interventions carried out with resources controlled by the public sector vs. longer term (nothing is permanent) structural changes carried out with resources controlled by the private sector.

Yes
50% (7)

No
50% (7)

Each candidate’s position on tax, debt, and regulatory policies was clearly on display. Trickle-down government versus unleashing the private sector was sharply contrasted by each candidate’s statements. For nearly every question, President Obama had a government solution, while Gov. Romney advocated private-sector solutions. Through favoring private enterprise and limited government, Romney showed his commitment to pro-growth tax reform by lowering rates and broadening the base in a revenue-neutral fashion that will actually create jobs and spur the economy. Obama could only double-down his commitment to spending more on big government programs with continual deficit spending and further raising taxes.

President Obama needed to more forcefully push the case for an additional stimulus package to to boost demand. He did correctly point out that the budget deficit was already $1 trillion plus when he took office. The lack of detail in Gov. Romney’s proposals makes it difficult to give him a grade. He refuses to mention which loopholes he would close or where the spending cuts would be, except for the $300 million cut to PBS. He says he won’t push for a tax cut that expands the deficit or raises taxes on the middle class, which effectively disavows his proposed 20 percent rate cut.

The president was not very successful in communicating why the next four years are going to be better than the last. He scored some points by criticizing the lack of details in Romney’s budget plan, but the governor responded that he had specified the core principles and would have to work together with Democrats and Republicans, as he had done in Massachusetts, to negotiate the specifics. Both candidates emphasized energy production as part of their economic plan, but Romney argued that the president’s “green energy” initiatives had proven to be wasteful failures and that more could be done in the way of approving leases on federal land and pipeline infrastructure. Both candidates also discussed health care costs and education, but I felt that Romney presented more promising proposals on both issues.

I would give an "F" to the useless moderator. I didn't hear much about economically retooling America: What will we manufacture? What skills will be required? What sectors do we encourage? While I thought Romney was the far better performer, neither candidate articulated an economic strategy. Instead, they used the "economy" banner to wonk on about whose tax plan was better and who can better solve the deficit. Romney's strongest remarks are that Obama has not fixed the economy. So we are to think Romney would do better, without the specifics. Unfortunately, for the moment it appears that voters will have to weigh in without much information on the economic vision thing.

But how could anyone actually expect reality prior to an election? Let’s say you ran for president and made comments like these below; you’d probably lose the corresponding votes (in percentages) and never be elected: At least 80 percent of all households should pay some federal taxes (26 percent lost); millionaires should pay more taxes than they do now (3 percent lost); We must phase in Social Security and Medicare to start later for those now under 50 years in age (25 percent-plus lost); and it will be very painful when we stop artificially keeping interest rates low (50 percent lost). So a few truths are all it would take to get down to nearly zero votes. Romney failed to tell us how he could lower tax rates and solve the budget. Obama failed to tell us when he will stop tinkering with artificial strategies to stimulate the economy.

Both candidates addressed the key issues that will shape the economy’s future: the deficit, taxes, education, energy, small business, trade, and health care. While 90 minutes did not allow enough time to spell out all the details, the two candidates presented two distinct views. President Obama believes that tax increases and spending cuts will be essential to deficit reduction, while Gov. Romney believes that spending cuts and economic growth are the answer. The president sees the federal government playing a major role in education, energy, and health care. Romney favors a focus on the private sector and competition along with a greater role of state and local governments. Now the voters will decide.

A national televised debate is about the worst way to discuss complex economic issues. Misinformation, anecdotes and fumbles were common. If this were a football game, I would be throwing a yellow flag on every answer. Budget: Neither was willing to say that we have to tax all of us more at the same time we have to reduce entitlement spending. Medicare: Each accused the other of endangering the system, without touching the hard truth that we can’t have Cadillac medical care on a Chevy budget. Regulation: At least Dodd-Frank and "Too Big To Fail" were discussed.